In 2022, the global crude oil supply and demand pattern is tight, superimposed with geopolitical risk factors, affecting the short-term oil price trend. As of March 23, Brent and WTI crude oil futures prices closed at US $121.6/barrel and US $114.93/barrel respectively. From the perspective of crude oil supply and demand fundamentals, the global crude oil supply and demand pattern will continue to be tight in 2022. On the demand side, OPEC predicts that the growth rate of global crude oil demand in 2022 will be 4.2 million barrels / day; On the supply side, the effective idle capacity of OPEC + in 2022 is insufficient, the implementation of the 400000 B / D production increase plan is difficult to guarantee, and the low Duc limits the expansion of American shale oil enterprises. On March 8, US President Joe Biden officially signed an energy import ban on Russia. With the further escalation of the conflict between Russia and Ukraine, the energy sanctions imposed by Europe and the United States on Russia may exacerbate the tense situation of crude oil supply and demand and affect the trend of short-term oil prices.
“Three barrels of oil” insists on increasing capital expenditure and sufficient oil and gas reserves, which is expected to benefit from the high outlook of the industry for a long time. Affected by low oil prices and the epidemic, overseas oil and gas giants have reduced capital expenditure one after another; The capital expenditure plan of medium and long-term overseas oil giants is still cautious, and they prefer green energy. The growth rate of global oil supply in the long term is low. With the gradual recovery of global crude oil demand and the limited space for long-term increase in crude oil production, the value of crude oil, as a basic energy, important chemical raw materials and important strategic reserves, is bound to rise again. Against the backdrop of sluggish global crude oil capital expenditure, Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) , CNOOC insisted on increasing capital expenditure and made breakthroughs in oil and gas reserves under the strategic guidance of “increasing reserves and increasing production”, which is expected to benefit from the high momentum of the industry in the long run.
“50 USD / barrel” is the performance inflection point of Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) upstream business, and “45 USD / barrel” is the performance inflection point of CNOOC upstream business. The marginal profit of “three barrels of oil” gradually decreases with the rise of oil price, and finally tends to be stable under high oil price The profit curves of Petrochina Company Limited(601857) and China Petroleum & Chemical Corporation(600028) are very close, and their oil production businesses gradually start to make profits after the oil distribution price exceeds US $50 / barrel, but Petrochina Company Limited(601857) has slightly stronger profitability due to its cost advantage; CNOOC’s oil production business can start to make profits after the oil distribution price exceeds $45 / barrel. According to our calculation, under the oil distribution price of USD 100 / barrel, the net profits of Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) and CNOOC upstream business are 165.8 billion yuan, 47.5 billion yuan and 85.9 billion yuan respectively The upstream performance of Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) and CNOOC increased with the rise of crude oil price. When the price of oil distribution rises by US $1 / barrel, CNOOC has the highest EPS thickening, followed by Petrochina Company Limited(601857) and China Petroleum & Chemical Corporation(600028) has the lowest EPS thickening.
Investment suggestion: considering the tight global crude oil supply and demand pattern and the impact of geopolitical risks, we believe that the international crude oil price will be high in 2022. The rise of short-term crude oil prices and the insistence of the three major oil companies on increasing capital expenditure in the medium and long term will benefit their performance. Therefore, we suggest to pay attention to the three major oil companies in China: Petrochina Company Limited(601857) (a + H shares), China Petroleum & Chemical Corporation(600028) (a + H shares) and CNOOC (H shares).
Risk analysis: epidemic spread risk, geopolitical risk, risk of too fast growth of OPEC production, risk of too fast growth of shale oil production, and risk of downstream profit fluctuation.
